Rowan receives two contracts, two term notices

Rowan Companies has issued an update on its drilling rig fleet.

Oct 19th, 2016

Offshore staff

HOUSTON– Rowan Companies has issued an update on its drilling rig fleet.

Cobalt will pay the contractor about $96 million in exchange for the right to terminate the contract for the ultra-deepwater drillship Rowan Reliance as early as March 31, 2017. This deferred revenue is expected to be amortized from April 1, 2017-Feb. 1, 2018 at the latest. If operations continue after March 31, 2017, the day rate will be reduced to about $262,000.

Perenco has contracted the jackupRowan Gorilla VII for an estimated duration of 60-200 days. The work is expected to begin in mid-November. The rig has been stacked since mid-August. Apache paid a standby rate of $153,000 from mid-August until mid-October and a lump-sum termination fee of about $9 million.

ConocoPhillips has announced its plans to terminate the contract for the Rowan Gorilla VI jackup for convenience at the end of 2016. Upon termination, the operator will pay $250,000/d for the remaining term of the contract through March 2018. Should the company source alternative work for the rig, the $250,000 day rate will be offset by any contract revenues in excess of $100,000/d.

Total has extended the contract for theRowan Gorilla V jackup until July 2017. The day rate is less than $100,000.

Rowan has secured a binding agreement to sell the 1984-builtRowan Gorilla II as a non-drilling unit. The sale is expected to close in 4Q 2016.

10/19/2016

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